A modified version of an existing drying shrinkage model developed by the authors is proposed which incorporates the influence of the aggregate on the process of shrinking. Whereas it is traditionally thought that the aggregate restrains the deformation of the cement paste and hence the shrinkage of the concrete, in this paper, the effect of aggregate on shrinkage is better represented by considering the effect of the aggregate on moisture diffusion. It is suggested that the presence of the aggregate modifies the diffusion of moisture which governs the moisture loss and hence the drying of concrete. Also, as the volume fraction of the aggregate in a normal concrete is about 75% or more, the shrinkage of the cement paste is ‘diluted’ by the aggregate in the concrete. Taking into account these effects, this new diffusion based shrinkage model has been proposed. To assess the accuracy of the new model the shrinkage of two concrete mixes is predicted and compared with the measured shrinkage of these mixes. Comparisons are also drawn with the shrinkage predicted using the Model Code 1990 (MC90). It was observed that the new model proposed here predicts the shrinkage of the concrete mixes more accurately than the MC90 model, particularly at early ages.